[ANALYSIS] Injap Sia’s MerryMart’s disconcerting voluntary delisting plan

Last Monday, the board of directors of MerryMart Consumer Corp. (MerryMart) approved the voluntary delisting of the company from the Philippine Stock Exchange (PSE) following an acquisition deal arrived at by the company with its listed affiliate, DoubleDragon Corporation (DoubleDragon). The acquisition deal is ongoing until June 16, 2026.

In this regard, MerryMart will be also holding a special stockholders’ meeting on July 7, 2026 to officially vote on the voluntary delisting of its shares.  

In the meantime, the shares of the company have been immediately suspended from trading by the PSE for both failing to file within the regulatory period the delisting announcement and submission of its quarterly report.

By the way, the PSE seemed to have been again left out, even though both companies are actively listed in the stock exchange. The acquisition deal was instead referred first to the Philippine Competition Commission (PCC), which consequently gave its approval after clearing and ensuring that the acquisition would not lead to an anti-competitive monopoly. And the Securities and Exchange Commission (SEC) also seemed to have only gotten to know about it upon the filing for the mandatory tender offer.

According to the acquisition arrangement, DoubleDragon will initially acquire 2.66 billion MM (MerryMart) common shares held by Injap Investments Inc., which is equivalent to 35% of MM’s outstanding shares.  

Injap Investments is the private holding company that serves as the primary investment vehicle for the business interests of the Sia family. Injap Investments is also the absolute majority owner of MerryMart.

Due to the size of the acquisition, DoubleDragon is to launch a mandatory tender offer for the remaining 65% of MerryMart shares at P0.48 each. 

Details of the purchase agreement 

DoubleDragon agreed to acquire 2.66 billion MerryMart common shares from Injap Investments Inc., representing 35% of the outstanding shares of the latter. The total amount of the deal is valued at approximately P1.28 billion, following MerryMart’s total equity valuation amounting to P3.65 billion.

The valuation of the shares was determined by using the 30-day Volume-Weighted Average Price (VWAP) of both listed companies. VWAP is a technical indicator that shows the true average price of a stock, calculated by factoring its “typical price,” which is the product of the stock’s high, low, and closing price for the day.   

On this basis, DoubleDragon shares were priced at ₱9.30 per share, while MerryMart shares were priced at ₱0.48 apiece. 

The terms of payment are as follows: 50% in cash (amounting to a total of P1.28 billion) and 50% in DoubleDragon common shares (equivalent to P637.97 million).

PCC’s approval came after ruling that “the merger would not substantially lessen market competition across retail space leasing or consumer goods.” 

Following clearance from the PCC, MerryMart received and filed the formal Tender Offer Report (SEC Form 19-1) of Double Dragon.  

The tender offer period already started last May 18, 2026. As earlier mentioned, the tender offer period will end on June 16, 2026. The target transaction date is scheduled for June 19, 2026, and the official settlement period is placed  on June 24, 2026.

Strategic purpose behind the deal

To begin with, DoubleDragon shifted its primary purpose from being a real estate developer to an investment holding company in 2021, renaming itself from DoubleDragon Properties Corp. into its present name.  

Edgar “Injap” J. Sia II is the founder of MerryMart. At present, he is the chairman and CEO of both Double Dragon and MerryMart. He holds the concurrent top leadership titles across both firms, steering their overarching strategy alongside business partner Tony Tan Caktiong, who serves as the co-chairman of DoubleDragon. (READ: Mang Inasal founder Injap Sia’s fresh business lessons)

It was through Injap Investments Inc. that Sia and his family co-controls DoubleDragon in a 50/50 partnership with Tony Tan Caktiong’s Honeystar Holdings Corp., with each side owning 35% of the holding company, with the remaining 30% held by the public.  

Incidentally, DoubleDragon also owns various non-listed properties, including People’s Hotel in Iloilo City and the historic Deco’s La Paz Batchoy restaurant chain. 

In last Tuesday’s press briefing, Sia explained that the move was motivated by a combination of circumstances that changed the operational complexion of both companies. In general terms, the decision stemmed from the stabilization of real estate assets, the attainment of a strong balance sheet, and the compelling strategic vision to diversify into a conglomerate. 

In particular, from a zero-floor area of leasable space the company has now over 1.024 million square meters of completed gross floor area (GFA) out of its real estate portfolios.  

Next, after DoubleDragon’s major fundraising events like the successful IPO listing of DDMP REIT Inc., which raised P14.7 billion and the major equity infusion by the Jollibee Group into DoubleDragon’s industrial leasing arm, CentralHub, cash reserves and overall balance sheet health have greatly grown strong. The exercises also boosted total equity to stand strong at P64.44 billion.

As a conglomerate, the group now has the corporate flexibility and operational readiness to achieve its revenue target of ₱500 billion by 2035. 

The weakening of the equities market across sectors amid current volatile economic conditions is also cited for the plan to delist. Accordingly, MerryMart is a classic example. 

Structurally, however, the shift is of no material significance. Sia will still be the driving force in expanding the hospitality services business in Hotel101 Global, exploitation of retail real estate business in CityMalls, and the development of industrial leasing in CentralHub. Tan Caktiong, on the other end, will still remain as co-chair in all of these concerns.

Market repercussion

MerryMart debuted in June 2020 at P1 per share. Surprisingly, its shares became a pandemic-era favorite, surging to nearly P8 in early 2021 before experiencing a steady decline to this day — even if the leadership in the company is the same as it was then. 

Prior to the trading halt, MerryMart shares last traded at P0.435. At the tender offer price of P0.48 per share, IPO buyers are losing more than half of their initial investment, while investors who bought during the 2021 peak face severe valuation drops.

Likewise, the common complaint against delisting is that the minority shareholders who reject the tender offer run the risk of being locked into an unlisted company with zero trading liquidity. The delay in the filing of the delisting announcement has as well left shareholders in the same dilemma wherein they were given little time to weigh their investment alternatives.

By the same token, even if the implied value of DoubleDragon shares offered under the exchange is lower than the company’s latest book value, it’s not enough assurance considering the forward-looking and speculative nature of the long-term expansion plans.

Finally, the tendency for major publicly listed companies to delist at prices well below their historical all-time highs has now slowly but surely served to discourage public participation in the capital market. What’s more, minority shareholders are always in the receiving end of delisting moves initiated by the majority or controlling shareholders. – Rappler.com

(The article has been prepared for general circulation for the reading public and must not be construed as an offer, or solicitation of an offer to buy or sell any securities or financial instruments whether referred to herein or otherwise.  Moreover, the public should be aware that the writer or any investing parties mentioned in the column may have a conflict of interest that could affect the objectivity of their reported or mentioned investment activity. You may reach the writer at densomera@yahoo.com)